How to Hire the Best and Brightest

"I don't hire anybody not brighter than I am. If they're not smarter than me, I don't need them." - Paul "Bear" Bryant, University of Alabama Coaching Legend

One of the best steps an employer can take to avoid employment lawsuits: Hire the best and brightest. Lawsuit prevention starts with "hiring smarter." This is not so much a reference to hiring better employees as it is a reference to being smarter in making hiring decisions. Employers who devote substantial time and attention to the hiring process are likely to have fewer problem employees and, therefore, fewer employee problems. Those employers are likely to recruit the best qualified applicants; to hire the individuals most suited for particular jobs; and to avoid potential problems during the hiring process. If more employers paid more attention to employee selection, they would spend much less time worrying about wrongful discharge and other employment-related lawsuits.

There are a number of components to the hiring process: recruiting, employment application, interviewing, testing, and decision making. This article will review the various tools that employers can use to aid their hiring decisions. The improper handling of these tools can lead to an assortment of claims under various employment statutes and common law causes of action. The key is for employers to use these tools in an appropriate manner to find the best and brightest, then to clearly document the nature of the employment relationship.

Define Your Job Requirements

An employer will avoid unnecessary terminations and layoffs by determining its specific needs before soliciting applications. The company should require the requesting department to justify the need to hire for a particular position. It must then define the functions the new employee would perform and evaluate the costs of a new hire.

The company then should develop a job description that includes all of the essential functions of the position and the physical and mental capacities required to perform the job. The person or department responsible for human resources should then discuss the proposed job description with persons within the appropriate department to make sure that the job description can then form the basis for processing applicants.

Under the Americans with Disabilities Act (ADA), any employment practice that adversely affects a qualified person with a disability who is able to perform the essential functions of a job, with or without a reasonable accommodation, may constitute unlawful discrimination. To determine the essential functions of the job, courts will probably look to the job description. 42 U.S.C. § 12111(8). Thus, it is essential to carefully prepare the job description to include all of the essential functions of the job.

Cast a Wide Net in the Solicitation of Applications

You will not attract quality applicants unless people know you are hiring and are aware of the requirements of the position you want to fill.

Advertising Rules of Thumb

1. Advertisements should be based upon and consistent with the job description you develop.
2. Advertisements should never state a preference for age, sex, race, religion, or other protected classification. In addition to federal and state law, be aware of the expanded protection granted by many local ordinances. Do not describe the job or the company in any manner that could lead to charges of discrimination.
3. Advertisements should not imply long-term employment if an at-will relationship is desired.
4. If a job has any significant negatives, such as excessive travel or extreme danger, the advertisement should not conceal this fact.

Problems With "Word of Mouth" Advertising

With "word of mouth" advertising, an employer depends on applicants learning of jobs from current employees. Thus, applicants usually are friends and relatives of employees. Can you see the problem? If you have a mostly non-minority workforce, and the percentage of minority applicants you get is less than what is expected for your employment area, "word of mouth" advertising and hiring can give rise to a strong circumstantial case of race discrimination. Numerous courts have found that "word of mouth" hiring practices that perpetuate existing racial imbalances in an employer's workforce are unlawful. Similarly, "word of mouth" advertising that results in a relatively small number of minority hirees (because the pool of minority applicants is disproportionately small) has been held to be unlawful.

So, what's the cure? Evaluate your hiring practices and procedures to make sure you utilize every reasonable and available means (newspaper and trade journal advertising, employment agencies, state employment agencies, vocational and educational institutions, etc.) to recruit a diverse pool of applicants so that you inadvertently are not creating or perpetuating a nondiverse workforce through informal "word of mouth" advertising and hiring.

Internal Job Posting

If company policy states that jobs are required to be posted, they must be posted to avoid breach of contract claims in some states. Absent one of these requirements, the decision to post internally should be considered as a possible means to promote employee goodwill.

Use of Recruiting Agencies

Recruiting agencies can be a valuable resource for companies looking for qualified applicants. Because they act as your agents, however, you may be responsible for any discriminatory acts of the recruiting agency.

Use of Gender- or Age-Based Terms in Advertisements

Even if you utilize a variety of recruitment tools, you must be careful of words you use when you advertise or ask for referrals. What's in a word? According to the federal Equal Employment Opportunity Commission (EEOC), quite a lot. Indeed, the EEOC has issued a bulletin on the use of what the agency calls "sex referent" language in job advertisements. What the EEOC is talking about is not something so blatant as indicating a sex-based preference in your help-wanted advertisements. Most employers know better than to advertise for "men wanted" or to run an ad for "career woman." What the EEOC bulletin deals with is the use of masculine or feminine terms, such as "patrolman" or "metermaid," in describing a position. The issue is whether an employer is telegraphing a sex-based preference by using this type of language, even though it is generic, common parlance and usually is done out of habit rather than some discriminatory intent. Although the EEOC's policy is that the use of "sex referent" language in advertisements is suspect, it does not constitute a violation of the law in the absence of further evidence of discriminatory intent.

The easiest way around the word problems is to "neuter" the language in your advertisements by using terms such as "patrol officer" instead of "patrolman" or " meter reader" instead of "metermaid."

Indeed, you avoid using any descriptions in advertisements that could be presented as evidence of discrimination, such as:

Do Not Use:	Use:
young (person, company)	high energy
recent grad	up-to-date knowledge
student	part-time
girl Friday	administrative assistant
couple	two-person job
married	stable
salesman	sales representative

Finally, define the amount of experience you want without putting an upper limit on it. For example, "two to four years of experience" almost guarantees your applicants will be younger; instead, say "two-plus years."

If you cannot eliminate or alter sex referent language (e.g., jobs such as "foreman"), then your ad should be accompanied by a statement that explicitly disavows a sex-based preference based on the job title. According to the EEOC, the inclusion of the phrase "equal opportunity employer," without more, is not enough to convey the required nondiscriminatory message. Moreover, the EEOC suggests that the use of this phrase by itself when advertising for a position such as "foreman" might even be misunderstood by the general population to mean that the employer's apparent preference for members of one sex is lawful. While the EEOC probably is taking things a bit too far here, why invite trouble? If you must advertise for a position such as "foreman," include a statement such as this:

The use of the term "foreman" does not mean, and should not be taken to mean, that male applicants will be given a preference. All qualified applicants will be considered without regard to gender or any other prohibited factor. This company is an Equal Opportunity Employer.

Prepare a Proper Application: If You Don't Need to Know, Don't Ask

Every applicant should be required to complete an application form. The application can be used to screen applicants and, if used correctly, can be an effective and legal hiring tool. The purpose of an application is to assist in finding the person best suited to the job description. Therefore, all questions on the form should be job-related. If the answer to any question on the application would not tend to provide insight into the qualifications of the applicant, the question should not be asked.

Do Not Ask Improper Questions

In preparing a job application, an employer must avoid violations of federal, state, and local laws prohibiting discrimination against protected classes. Title VII of the Civil Rights Act of 1964, as modified by the Civil Rights Act of 1991, 42 U.S.C. § 621 et seq., prohibits discrimination based upon race, sex, religion, and national origin. The Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., and the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., prohibit discrimination on the basis of age and disability, respectively.

A general rule is to avoid irrelevant questions. A question is irrelevant if it is not related to the job description. Irrelevant areas of questioning include:

1. Race, sex, religion, national origin, and citizenship. This information is never relevant.
2. Age. The age of the applicant is not relevant. Likewise, date of birth and the year graduated from high school would elicit improper age information and should be avoided.
3. Height and weight. Unless justified by clear business necessity, such questions may lead to charges of disability, sex, or ethnic discrimination.
4. Marital status, including child care provisions and likelihood of pregnancy are prohibited.
5. While questions of availability for overtime work or travel may be relevant, framing the questions in terms of family status may lead to charges of discrimination.
6. Education. Do not ask about education if it is not necessary for the position. If education is considered, avoid charges of discrimination by also asking about related experience in the field.
7. Arrests and convictions. Never ask about arrests. Inquiries into misdemeanor and felony convictions may be permissible depending on state laws, but such inquiries must be job-related.
8. Disability. Pursuant to the ADA, no inquiries should be made into the applicant's handicap or disability.
9. Sexual orientation. While not a protected class in the state or federal system, many cities have passed local ordinances prohibiting discrimination based on sexual orientation.
10. Photograph. A photograph may reveal that an applicant is a member of a protected class. In addition, the appearance of a person is probably not related to job performance. Thus, applicants should not be required to submit a photograph.

An employer may need to know about some of the above information to comply with other regulations. Employers should wait until after an offer of employment has been made to obtain this information. For example, age and marital status may be relevant for insurance purposes. Employers must verify the citizenship or eligibility of applicants to work in the United States. Employers may also have a legitimate interest in conducting medical examinations of new employees. All of this information can be obtained after an offer of employment is made.

Use the Application to Limit Future Liability

The employment application provides employers with a valuable opportunity to limit their potential liability. Employers should consider adding the following information to their applications:

• At-will relationship acknowledgment: A simple waiver in an application stating the applicant understands that the employment would be at-will, and terminable at any time for any reason or for no reason, provides the employer with an additional defense in a wrongful termination lawsuit.
• Authorization and release for testing and reference checking: The application should specify what physical and skills tests the employer intends to perform. The application should also inform applicants of a company's intent to contact references. The employee should be required to authorize such tests and investigations, and should release the company and any third party from potential liability arising out of the tests or investigations.
• EEO statement: Although this statement is not always required by law, an employer should consider using an application form containing a simple statement that the company is an equal opportunity employer and does not discriminate on the basis of any protected classification. This statement is expected by many government agencies, and it can be used to rebut an applicant's claim that the employer acted upon information in the application with discriminatory intent.
• Provision for misrepresentation: The application form should contain a statement that all of the information on the form is true, that no misrepresentations have been made either on the form or otherwise, and that no material information has been withheld. The applicant should understand that if any answers are found to be false or misleading, the application will be rejected or the statement will be grounds for immediate termination.

Conduct a Proper Interview

The interview provides employers and applicants with an excellent opportunity to find out relevant information. When properly conducted, the employment interview can reveal a great deal about the applicant's ability, willingness, and potential fit within the company. To fulfill this purpose, interviewers should follow a number of simple guidelines.

Be Consistent

Employers should adopt consistent and written procedures for conducting interviews. Employers should not vary interview inquiries from one applicant to the next. Such changes could invite charges of bias or discrimination. Recruiters should be trained in interviewing techniques and should be instructed to use standardized, job-related questions. While questions should be open-ended, interviewers should be careful to avoid demonstrating favoritism or asking questions regarding protected classes.

Be Prepared

Before the interview, refer to the job description and determine what technical skills and performance characteristics are important. The employer should prepare questions designed to elicit information regarding these characteristics.

The employer is in a position to dictate the tone of the meeting by treating the interview like a conversation, not an interrogation. Explain to the applicant how the interview will be structured. Explain that you will be asking questions about education and experience, work history and job performance, and that you will be taking notes. If there is more than one interview scheduled, assure the individual that you will finish in time for the next meeting and will escort the applicant to the next interview.

Ask the Right Questions

The questions you ask will center around three basic elements:

• Ability
• Willingness
• Fit

Questions about relevant educational background, work experience, management style, business philosophy, and motivation will help you determine how an individual will fit into your corporate culture. Avoid questions that require yes or no answers. Always ask an interviewee for detail, clarification, and examples. Stack or layer your questions, building one upon the other. With each layer of questions, you should gain information and insight. Maintain control of the interview, but allow the applicant to do most of the talking.

Examples of legally permissible interview questions that likely will elicit necessary applicant information include:

• (if presently employed) Why are you seeking a job change?
• Which of your various jobs did you like the best? Least? Why?
• Why did you leave your last job?
• Tell me about a typical day in your present (or last) job.
• What type of criticism has your current (or former) manager given you?
• If you could have made improvements in your last job? what would they have been?
• What has been the most interesting job or project of your career?
• What were your most important work accomplishments during the past two years?
• What do you know about this company?
• What would be your greatest contribution to our company?

Avoid Prohibited Topics

Questions in an interview should be limited to non-discriminatory inquiries into job-related characteristics. The same rules apply to interviews that applied to the application. If an applicant unexpectedly volunteers information about a prohibited subject, ask a job-related question to guide the interview back to its intended purpose.

A job interview is a dynamic process in which even experienced interviewers can encounter various pitfalls leading to legal liability. For example, to make applicants feel comfortable, interviewers sometimes engage in informal "chitchat" or "off-the cuff "joking. Unfortunately, rejected candidates might use these conversations against the company as evidence of discrimination. To limit such liability, employers should compose a list of appropriate "small talk" topics and formal interview questions, follow the list in each interview, and document every interview comment and response.

If an applicant volunteers unnecessary information, the employer quickly should refocus the interview to a job-related topic and politely remind the candidate to answer only the particular questions asked. Although this approach reduces the interviewer's spontaneity, it also reduces the odds of an interviewer inadvertently making an inappropriate comment. Moreover, this method gives employers a much needed "paper trail," which could benefit the company in a lawsuit.

Active listening is essential if one is to conduct a productive interview. Encourage the applicant to provide detail about background, experience, and career goals. Do not comment excessively or inappropriately. Reducing the amount of comments that you make will reduce the opportunity for the applicant to modify answers in an attempt to please the interviewer.

Give the Applicant the "Right" and Honest Answer

Allow the applicant time to ask any questions he or she may have. Such questions may give insight into the applicant's interests, priorities, and motivation. They also give the interviewer an opportunity to clarify company policy.

If the applicant asks a difficult or sensitive question, do not avoid the topic or change the subject. Be honest, answer the question truthfully. Limit your answer to what you know -- do not guess or make up an answer that sounds acceptable. If you are unable to give a complete answer, assure the applicant that you will find out the answer after the interview and contact the applicant as soon as possible.

Never lie or conceal the truth in an interview. If an applicant relies on your answer and is later harmed by the truth, she may have a claim against the company for fraudulent concealment. For example, if an applicant inquires into the financial stability of the company, and the truth is that the company is near bankruptcy and that her position may be terminated at any time, be honest. If you lie and she accepts the position in reliance on a positive financial forecast, she may have a claim for fraudulent concealment.

Take Careful Notes

Take notes of the responses to your questions. Document the interview as you would any other employment event. Avoid referencing characteristics that may reveal membership in a protected class, such as age, sex, or race.

Decide Fairly and Objectively

At the conclusion of the interview, interviewers should be instructed to record job-related comments on a standardized interviewer appraisal form. Comments should be objective and related to the applicant's ability to satisfy the requirements of the job description. Every hiring decision must adhere to EEO guidelines and to your company's personnel policies and procedures.

The Bottom Line

Individuals conducting interviews should not make any representations or promises about job security, length of employment, or reasons warranting discharge. Even if the employer's job application form and employee handbook state that employment is strictly "at-will," statements or promises in interviews that "employees will have a job as long as their performance is good," or that "this is a company from which they can retire," for example, can easily undermine the most well-prepared documents.

Training is the key to avoiding potential liability arising from interviews. Individuals conducting interviews and those involved in the hiring process should be educated about inquiries that are impermissible under the federal and state employment discrimination laws.

Evaluate Use of Applicant Testing

Employers should carefully evaluate the need for and propriety of applicant tests. Employers should consider the job-relatedness of the tests, the validity of the tests, and the possible discriminatory impact of the tests.

General Rules

Employers should not require applicants or employees to take any tests absent a clearly articulated and important business necessity. Employers should not use a test unless it is considered valid. Validity can be measured three ways. "Criterion-related validity" means that the test is an accurate predictor of the employee's ability to competently perform the work assigned. "Content validity" is satisfied if the test closely matches the duties of the job description. "Construct validity" is achieved if the mental and psychological traits necessary to successful job performance are tested accurately. If a test does not meet one of these three standards, the test should be abandoned.

Title VII allows employers "to use any professionally developed ability test provided that such test is not designed, intended or used to discriminate because of race, color, religion, sex or national origin." 42 U.S.C. § 2000e-2(h), The Uniform Guidelines on Employee Selection Procedures (1978), 29 C.F.R. § 1607 (1995), provide strict guidelines for the administration of applicant tests. If a test has a disproportionate impact on a protected classification, the test is deemed discriminatory. When a disproportionate impact is found, the guidelines require the test to be valid. The test must accurately measure a characteristic required by the job description, and the employer must show a business necessity for using the test.

Performance Tests

The purpose of a performance test is to determine whether an applicant or employee can perform the tasks set forth in the job description. A valid performance test should require the applicant or employee to perform the primary job tasks under actual working conditions. Care should be taken that a performance test actually measures the applicant's ability to perform the primary job tasks. For example, an applicant for a position as a driver should not be required to take a paper-and-pencil driving test, because such a test may emphasize the applicant's reading and writing skills. A road test would be more appropriate.

Job-Related Physical Examination

The ADA prohibits covered employers from conducting pre-employment medical examinations. You must make a conditional offer of employment before you require an applicant to take a job-related medical examination. A post-offer medical examination or medical history questionnaire is permissible provided that:

• All applicants in the same job classification are required to take the same medical examination or to answer the same questions regardless of disability;
• The results of the examination are kept strictly confidential and separate from the employee's personnel file; and
• Decisions based upon the examination are job-related. 42 U.S.C. § 12112(d).

Be sure that the doctor performing the examination for your organization has reviewed your job description and understands the physical and mental demands of the job. The examination should be limited to determining whether the individual is capable of performing the essential functions of the job with or without a reasonable accommodation.

Drug and Alcohol Testing

Drug tests are not considered medical examinations for purposes of the ADA. 42 U.S.C. § 12114. Use of pre-employment drug tests may discourage problem applicants from completing the application process. An employer is permitted to prohibit alcohol consumption at work and to forbid employees from coming to work with detectable traces of alcohol in their systems. Under the ADA, however, alcoholism is a protected disability if the individual is undergoing rehabilitation. Therefore, avoid questions about alcoholism and instead focus on the applicant's ability to perform the job safely.

However, legal challenges based on state constitutional and common law causes of action, as well as discrimination laws, may make drug testing difficult and expensive. Before an testing program is implemented, employers should ask the following questions:

1. Why test? Employers should first examine the reasons why a substance abuse testing program is necessary. Testing may be in order, however, if there are genuine, legitimate safety or productivity concerns.
2. Who to test? Employers should decide which employees may be subject to testing. For example, there may be little benefit in testing employees in nonsensitive positions where safety is not a concern.
3. How to test? The employer should develop, in writing, a complete substance abuse testing program, including those to be tested, the conduct of testing, and the disposition of the results, whether negative or positive. The program should be designed to serve legitimate, narrow, business-related purposes.

Polygraph Examinations

The federal Employee Polygraph Protection Act of 1988 places extremely strict requirements on the use of polygraph examinations in the workplace. Private employers are forbidden from using lie detector tests to screen applicants in most cases. 29 U.S.C. §2001-2009.

Other Psychological Tests

Employers have used a variety of innovative tests in an effort to hire the best applicant. These include aptitude tests, personality tests, and handwriting analysis. Such tests can be administered to measure an individual's intelligence, motivation, emotional adjustment, and honesty. By measuring these traits, employers may be able to evaluate whether job applicants are adapted to a particular job and whether they can handle the job-related stress.

These tests are generally conducted by having prospective employees respond to written questions which, in combination with focused interviews, are then used to provide a psychological picture of the applicant. Employers should seek reputable testing companies with proven validation studies. A number of these tests have either proven to be inherently unreliable in predicting job performance or to be invasive of personal privacy rights, so employers should cautiously evaluate the need for such tests.

Consider Conducting Background Checks

In addition to applications, interviews, and tests, a background check to evaluate an applicant's past performance can be an important tool in the hiring process.

Reference Checks

Obtaining references from an applicant's past employers or acquaintances can be a valuable tool for predicting future performance and reliability. Because giving references can lead to legal liability, however, people are increasingly reluctant to provide complete information in a reference check. The key to obtaining accurate and complete references is to minimize the risk that the former employer may be exposed to a lawsuit for defamation. To increase your chances of obtaining honest and accurate references, you should:

Determine the Purpose of the Reference Request

Employers in different fields have different needs and concerns when hiring a new employee. For example, companies searching for a new construction worker, child care professional, or bank teller do not need to know the same information. Thus, the first step in a coherent references policy is to evaluate the position to be filled and determine what characteristics would be valuable and what traits would be undesirable in a new hire. Your questions should then be tailored to meet those needs.

Be Consistent in Applying References Policy

How an employer acts during the hiring process may reveal bias and can expose the employer to a lawsuit for discrimination under Title VII or the ADA. To avoid a suit for discrimination, you should be consistent in applying your references policy. Require that every applicant for a given position undergo the same reference procedure. Be consistent with the time frame from which references should come. For example, require that applicants provide the names of all employers the applicant has worked for in the past 10 years. Be consistent with the information sought from references. Finally, if you contact references from some applicants at a specific stage in the hiring process, you should contact the references of all applicants at that stage. A consistent policy will reduce the appearance of bias and can minimize the risk of a discrimination lawsuit.

Obtain the Consent of the Applicant

Consent is a valid defense to defamation. Require that all applicants sign an authorization and release. The form should authorize the employer to contact any former or current employer or any organization, person, or school named in the application or resume. The form should authorize those contacted to provide the employer with relevant information and opinions that may be useful to the company in making a hiring decision. Finally, it should release such persons and organizations from any legal liability in making such statements. While this release may not constitute consent if a former employer maliciously lies, it does provide former employers with an added level of protection and may encourage them to provide complete and honest information in response to a reference request.

Request Information From References

Call the employer from whom a reference is sought. Indicate a desire to ask questions about an applicant, and determine whether the employer has a stated policy in giving references. If the employer is willing to reveal information, formally request the reference in writing. Include a list of specific questions, and provide space for the employer to make additional comments. Indicate that you might follow up the reference check with additional questions. Enclose a copy of the signed applicant release.

Ask the Right Questions of References

While a generic question about an applicant's strengths and weaknesses might be useful, specific questions adapted to the needs of the position to be filled should elicit valuable information while minimizing the risk of lawsuits. Ask objective questions that focus on the applicant's skills and performance as they relate to the applicant's ability to perform the requirements of the job description.

Remember that references may be more willing to discuss the applicant's work history if the topics discussed are objective and verifiable. Such information includes the positions held, dates of employment, salary, and attendance record of the applicant.

Keep Records

An employer must keep accurate records of every reference sought and obtained. If an employer refuses to reveal information beyond an employee's dates of employment, positions held, and salary, ask the employer to document its refusal in writing. A claim for negligent hiring can be defeated if the hiring employer can demonstrate that it attempted to obtain additional information but was unable to do so.

If you choose to conduct the reference check by telephone or in person, keep an accurate record of the conversation, including records of the parties to the conversation, the date and time of the call, the questions asked, and the answers given.

Alternatives to the Formal Reference Check

Formal reference checks may not provide you with complete information about an applicant. Employers frequently refuse to divulge complete information. Even if they do, a prospective employer may be interested in learning more. Following are some of the methods that employers should consider when attempting to make an informed decision.

The Informal Reference Check

People in the Human Resources Department may have very limited personal knowledge about a former employee. Have applicants name former coworkers, direct supervisors, and subordinates. Contact these people directly and indicate the purpose of the request for information and that you are not asking them to speak on behalf of their employer. While many of these people may be unwilling to talk, some may provide a candid evaluation of the applicant.

The Applicant As a Positive Reference

While applicants have a vested interest in revealing only positive information about themselves, employers can learn from the ability of an applicant to provide proof of good performance. Request that the applicant provide letters of recommendation, performance evaluations, portfolios, and other evidence of good performance. An applicant's inability to do so may be cause for concern.

Gaps in the Application As a Reference

The application itself may reveal potential problems. An applicant's reluctance to provide references or names of supervisors could indicate fear of a negative evaluation. The number of jobs held and the length of employment at each job is also significant. If an applicant has never stayed at one job for more than one year, for example, it may indicate that the applicant is unreliable. An employer should likewise be concerned if an applicant is unable to account for time not included in the application. Employers should not assume, however, that these factors are necessarily indicative of a problem employee. An applicant should be given the opportunity to explain his or her individual situation.

The Reason-for-Leaving Reference

An additional area for inquiry is the applicant's attitude toward past and current employers. Employers should inquire as to the reasons an applicant left a prior employer. An applicant that was terminated because of misconduct might not make a good addition to your company. Likewise, an applicant that claims to have had a personality conflict with his past three supervisors might have difficulty working for his fourth. While an applicant's reason for leaving a prior employer may be unobjectionable, it is always a good idea to ask. If possible, verify the reason given by the applicant during the reference check with the former employer.

If the applicant is currently employed, ask why the applicant is looking for a different job. Understanding the applicant's motives can indicate whether the applicant will be loyal to your company if hired. In addition, if the applicant has been laid off and is subject to recall, there may be a risk that the applicant will return to the former employer.

Credit Check

Employers should not perform credit checks unless there is a clear business necessity and the credit check is related to the job description. In addition, the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, as amended, regulates the use of consumer credit reports in the evaluation process. An employer requesting a credit report must:

1. provide the subject of the report with a "clear and conspicuous disclosure ... in a document that consists solely of the disclosure" that such a report may be obtained for employment purposes;
2. get the person's written authorization to obtain the report;
3. before taking any adverse employment action against a person (such as refusing to hire the person) based in whole or in part on a consumer report, provide the affected person with a copy of the report as well as a written description of that person's rights under the FCRA; and,
4. if adverse action is to be taken against the subject of a report, provide by oral, written, or electronic means:
5. • notice to the affected person of the adverse action;
   • the name, address, and telephone number of the consumer reporting agency that provided the report to the employer, along with a statement that it was not the agency that made the decision to take the adverse action and, thus, the agency cannot tell the applicant or employee the specific reasons for the action;
   • notice of the person's right to obtain, within 60 days of notice of the adverse action, a free copy of the report on which the action was based; and
   • notice of the person's right to dispute the accuracy or completeness of the report with the consumer reporting agency.

Criminal Background Check

Convictions

The use of criminal convictions in employment decisions is restricted by laws in many states, such as the Pennsylvania Criminal History Record Information Act, 18 Pa. Cons. Stat. Ann. § 9125. An employer in Pennsylvania may consider felony and misdemeanor convictions only to the extent that they relate to the person's suitability for employment in the position sought. If an employer decides not to hire an applicant based in whole or in part on such criminal history, the employer must notify the applicant in writing.

Arrests

When conducting a background check, do not inquire into the arrest record of the applicant. Arrests are not conclusive indicators of illegal behavior and use of arrest records may be deemed discriminatory.

Driving Record

An employer should not inquire into the driving record of an applicant unless driving is an essential function of the job. Care should be taken when considering a history of drunk driving arrests, because recovering alcoholics are protected under the ADA. Evidence that an alcoholic is not currently rehabilitated may be considered.

Make the Decision and Then Document the Nature of the Employment Relationship

Hire the best qualified applicant who meets or exceeds expectations for the position, and make an objective record of the reasons for your decision. If you are not satisfied with any of the applicants, readvertise the position. It is more productive to spend extra time interviewing more applicants than disciplining an employee for poor performance or testifying in an administrative or court proceeding about a termination. If you do decide to extend an offer to one of the applicants, carefully frame your offers and rejections to avoid legal liability.

The Grid System for Screening Applicants

A substantial portion of the discussion so far has been on: "What can't be said, asked, or done to select the best candidate." The question that most employers should ask is then: "How do I pick the best and brightest?"

The answer may be to start with the job description and listing each job requirement. Weigh the requirements to reflect their importance based on legitimate business reasons. Then using all the lawful information that you have obtained, rate each candidate against those requirements. The following grid is one systematic approach for evaluating candidates.

	Essential Functions	% Weight	Legitimate Business Reasons
Candidate A
Candidate B
Candidate C

The Offer Letter

Like any legal arrangement, the offer should be in or confirmed by writing. If the employer intends to create an at-will relationship, the offer letter should not in any way mislead the recipient. Friendly references to a "long and successful career with the company" could lead to an unwanted lawsuit. If the offer will be conditioned on the results of a medical examination, the offer letter should be clear as to what is required.

An offer may be revoked if you discover that the person gave false or misleading information during the hiring process or if your company has a layoff. Employers should try to avoid revoking an offer, because new employees often rely on the offer to their detriment. Employers in some states may become liable for the employee's losses arising from the reliance.

The offer letter should outline the employee's salary and the types of available benefits. Since some employees have argued in litigation that an expression of annual salary is a promise of employment for one year, the offer letter should express salary in smaller units, such as weekly or monthly.

If the offer includes salary increases after a certain period of time, the letter should make clear that the future salary increase is not a guarantee of continued employment. Accordingly, the letter should contain a statement that, if the employee accepts the offer, he understands that he will be employed at-will. Although employers can certainly encourage the individual to accept the offer or welcome him aboard, employers should be careful to avoid making any statements or representations concerning the length of employment, job security, or reasons for discharge. In those situations in which there are guarantees of length of employment or of severance benefits, that too should be spelled out in detail or should reference any applicable employment contracts.

In writing your offer letter, please take certain preventive measures:

1. Avoid the use of terms that create the impression of a contract, such as "offer" or "acceptance."
2. Do not write in terms of guarantee and certainty regarding benefits.
3. Avoid terminology that can be construed to grant more than you intend. For example, even though management speaks in terms of annual salary to a prospective management employee, it is not necessary that a written letter express the salary as annual.
4. Leave out references to terms and conditions of employment if possible, except to state that the employee's terms and conditions of employment are explained by the enclosed handbook.

Rejections

When a decision to reject an applicant is made, the reasons for the decision should be carefully documented. Objectively evaluate the rejected applicant in comparison to the job description. The best rejection letter is short, thanks the applicant for applying, and states that the qualifications of the applicant do not match the current needs of the employer or that the position has been filled. Listing specific reasons for the decision in a rejection letter invites legal challenges.

Alternative Methods for Documenting the Employment Relationship

There are a number of documents in addition to the offer letter that can be used to establish (or to confirm) the nature of the employment relationship. They include:

• Employment Application

An applicant should acknowledge in writing that, if hired, the employment is at-will. For example, an applicant might be required to sign the following:

I understand and agree that, if hired, my employment is for no definite period of time and may, regardless of the date of payment of my wages or salary, be terminated at any time for any reason. I understand that no person other than the President of XYZ, Inc., is authorized to enter into any agreement for employment for any specified period of time, or to make any agreement contrary to the foregoing. I have not relied on and will not rely on any oral or written statements to the contrary.

• Written Employment Contract

A written employment contract should explicitly establish the nature and conditions of the at-will employment relationship, and the employee should sign the contract. An additional clause providing that further modifications of the agreement must be in writing signed by a designated officer reduces the possibility of inadvertent alteration of the at-will relationship.

In the face of an increasing number of wrongful discharge lawsuits, employers may consider giving certain employees employment contracts for a specific duration. One advantage of an employment contract is that it can give employers the ability to terminate the contract, and the employee, either with cause or without cause. Employment contracts can also explicitly detail the employee's rights and responsibilities, including an obligation to arbitrate employment disputes.

Typically, such contracts provide that the employee may be terminated without notice for just cause. However, they may also provide that the employee may be terminated without just cause, so long as the employer provides notice, usually from 30 to 180 days, with pay. The employer should retain the option of paying the employee during the notice period but not requiring that any work be performed. Employers who terminate contract employees in accordance with the contract's provisions are generally free from liability for breach of contract and contract-related claims. Tort claims, however, are not necessarily precluded; nor are claims under the discrimination laws.

• Employee Handbook

The employee handbook should explicitly state that employment is at-will. In addition, the handbook should be carefully written to avoid contractually binding commitments. For example, defined disciplinary rules might be interpreted to limit an employer's options in the event of a rule violation. The handbook should make clear that, regardless of discipline options, employees may be terminated at any time for any reason.

I-9 Forms Required by the Immigration and Naturalization Service (INS)

As a result of the Immigration Reform and Control Act of 1986 (IRCA), all employers are required to complete and maintain I-9 forms, which contain proof of an employee's eligibility to work in the United States. The employee must provide documents establishing identity and employment eligibility. The only individuals for whom I-9 forms are not required are leased employees, independent contractors, and persons employed for domestic work in a private home on an intermittent or sporadic basis (as opposed to a weekly or other regular basis). Employers also do not need to complete I-9 forms for persons hired before November 7, 1986, or those hired after November6, 1986, who left employment before June 1, 1987.

The INS is authorized to conduct random, unannounced audits of any employer's records. Moreover, some of the information contained on the I-9 may be used in support of certain types of discrimination claims. Thus, employers should maintain their I-9 documentation separate from personnel files.

Rejected Employee Applications

Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) require employers to maintain employment applications for a period of one year from the date of rejection. If a discrimination charge is filed, employers must maintain these records until the final disposition of the charge.

Executive Order 11246, which applies to employers with federal government contracts of at least $10,000, imposes recordkeeping obligations on employers with at least 50 employees and $50,000 in federal government contracts. These employers are required to keep information on all applicants for employment indicating race, gender, handicap, or veteran status and requested position for one year after rejection. For contractors with over 150 employees or a government contract of over $150,000.00, the applications must be kept for two years.

Avoid Negligent Hiring

"Hiring Right" is a good way to ensure that your company hires the person best qualified for the job. It is also a useful tool to avoid claims of negligent hiring. A negligent hiring claim can arise when a third party is injured by an employee, even if the employee acted outside the scope of the employment. An employer can be liable for placing an employee in a position to injure a third party when the employer knew or should have known that the individual was unfit for a particular position. An injured party states a claim for negligent hiring when:

• the employer knew or should have known that the employee was incompetent or unfit for the job in question;
• harm to the third party was foreseeable;
• the employer's failure to learn of the employee's incompetence or unfitness was
• the proximate cause of the injury to the third party; and
• injury to the third party resulted.

This cause of action places a duty on employers to investigate applicants for certain positions. If a background check would have revealed dangerous propensities, courts will probably hold that the employer "knew or should have known" of the problem and should not have hired the employee. For example, if a child care facility hires a person who abuses children at the facility and a simple background check would have revealed that the employee had been convicted of child abuse on a previous occasion, the child care facility may be liable for negligent hiring. In general, if the employment position is one of power, trust, or public contact, employers should carefully consider conducting a thorough background investigation. Such positions include jobs in child care, law enforcement, medicine, and financial institutions.

If an employer is unable to obtain the information that would give rise to liability for negligent hiring, the employer will escape liability. For example, if the child abuse conviction in the previous example was sealed and not a matter of public record, the child care facility would not be liable for negligent hiring. A defense based on this theory can also arise if a former employer was unwilling to disclose negative information. In that case, the hiring employer should ask the non-disclosing employer to document in writing its refusal to divulge information.

Employers clearly have a strong interest in obtaining thorough and accurate information about prospective employees. Careful consideration of candidates at the application and interview stage is an important first step in screening out unwanted applicants, but the best way to avoid negligent hiring claims is to conduct a thorough background check. The preceding sections were designed to enable you to legally obtain as much relevant information as possible,

In summary, follow these guidelines:

• Step 1: Carefully review all information provided on the job application form.
• Step 2: Look closely for any "gaps" between jobs, the reluctance of an applicant to answer certain questions, or answers that are out of the mainstream.
• Step 3: If it's not on your application form, require applicants to sign an authorization and release for you to gather information from former employers. Even though most employers have a policy against releasing personnel information (other than to confirm position and dates of employment), you at least must be able to demonstrate that an effort was made to obtain it. In this case, you do get points for trying.
• Step 4: Contact all personal references provided by the applicant.
• Step 5: Verify prior places of residence provided by the applicant. When the applicant is not local, this may be problematic unless you are willing to pay for a report from a consumer credit investigation agency and comply with the requirements of the Fair Credit Reporting At discussed above. If the applicant is local, you can refer to old phone books or city directories. If you don't have these references, they're available in the public library.
• Step 6: In cases involving particularly sensitive jobs, determine whether an applicant has a criminal record.
• Step 7: Make a record of your investigation.

Hiring the Best and Brightest Inventory

Now that you know some of the basic rules of "Hiring Right," it is time to put these rules to the test at your company. The best way to avoid liability in the future is to make necessary changes in your hiring practices. Ask other personnel involved in the hiring process to be involved in assessing your hiring practices. Be honest and critical -- now is the time to find problems and eliminate them.

Conclusion

Some economists predict a labor shortage for certain industries and occupations over the next 10 years. In this context, some employers may accelerate the hiring process and compromise on well-developed hiring practices. Such a tendency may result in costly litigation, particularly in light of the forecast that the American workforce will become increasingly diverse. Even with these demographic changes and dramatic increases in litigation, employers who implement thoughtful and informed hiring practices will gain a competitive advantage in the marketplace.